Stock market crash freezes second hand property market; Tuen Mun public houses are 6.8% cheaper.
(By Yan Lunle)
Many house owners are shocked by the large up and down in stock market, leading price cut transactions appeared, which mostly occurred among small cost houses that rose high in earlier, for example Tai Po Centre has unit sold at price 9.1% lower than market price, and Tuen Mun even has public house being cut by 6.8% within one week before resale. Yesterday, Gale Well Group Chief Executive Officer Tong Man Leung who has predicted property price will in earlier again looks dull to property market, and believed property market steps into corner stage.
After the stock market crash, Tong Man Leung published article on line again yesterday, titling when trend corner appear? He believed, current property market has stepped into corner stage, and many Hong Kong people buy house in terror because they are afraid of higher and higher property price in future so they buy house even when they have not enough payment, ignoring there will be more supply, interest will rise and other negative factors.
Hong Kong people buy house under worry.
We have to greed if we notice that they buy house because of price rising fear, while greed means we can use this fear and sell them second grade property at high price, he believed.
When buyers change the reason of fear, like change from fear of no suitable houses for them into fear of too many supply or interest rising or other negative factors, then property price will be lower than market level, thus the corner stage begins, Tong Man Leung pointed.
He believed current property market situation is similar to this.
In fact, property market trend kept up before the stock market crash, leading Tuen Mun public house sq ft price rose above HKD 10 thousand firstly. Tuen Mun LEUNG KING EST Leung Chun House high floor room 8 in area of 152 sq ft was sold at HKD 1.55 million including land premium on 28th last month, with sq ft price up to HKD 10,197, being the first public house at sq ft price above HKD 10 thousand in Tuen Mun, according to data from Land Registry.
LEUNG KING EST transaction sq ft price decreases.
However, until today, Leung Wai House high floor room 28 in same project was sold at HKD 2.05 million after the original owner cutting up to HKD 0.15 million within one week, price cut in 6.8%, and the unit area is 264 sq ft with sq ft price at HKD 7,765, Many Wells Chen Sau Cheun expressed.
At the same time, many owners cutting price to sell houses because of stock crash, and small size property price of which has rose fast these years was cut the most and harsh. The original owner of Tai Po Centre block 8 low floor room F in 371 sq ft and two rooms layout asked for HKD 4.25 million at first then cut to HKD 4.1 million and later negotiated to cut to HKD 3.9986 million, which was finally deal, with price cut in HKD 0.2514 million or 5.9% and the sq ft price at HKD 10,778, Centaline Property Huang Tat Hung expressed.
The market value of same style unit is about HKD 4.4 million, so the transaction price is lower about 9.1% than market price, and the seller want to buy stock by property sale income when the stock market in floor level, who was willing to supply more discount to speed up the sale, Huang Tat Hung pointed.
In fact, property market transaction has been in down trend, according to the latest data from Land Registry, in first 24 days in August, Hong Kong registered 4,066 transactions, sharply down 30% than number in same period of July; The transaction amount is HKD 27.99 billion, down 39% than which in July. There into, first hand residential transactions is 598, largely declines by 39%. Second hand residential transactions are only 2,579, down by 26%.
Property transaction may be the lowest in 17 months.
Property transactions predicted to be about 5,300 and about HKD 36.8 billion finally, down by 28% and 34% than data in July, and transaction number may has declined for two months going to the latest number in nearly 17 months because of the effect from stock market crash in the past one month, Ricacorp Properties Research Department director Chen Hoi Chiu estimated.
Besides small cost house, luxury property also is affected. The peak southern district registered 7 transactions until 24th in August, largely decreased by about 77% than 31 transactions in same period in last month, while there was even no transaction in the past one week, Midland Fang Fu Yee expressed. Shocked by the stock market crash recently, plus with effects from raining in couple days ago and many potential buyers go for a trip in summer holiday, the property visiting decreased by about 25%, and commonly potential buyers wait and see, Fang said.
